United States District Court, D. Kansas
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Gregory Hattrup, Lenexa, KS, pro se.
Christopher B. Bacon, Lowe Law Firm, LLP, Olathe, KS, for
D. Crabtree, United States District Judge.
Plaintiff Scott Gregory Hattrup filed suit against the
United States, Julia Deng, and John Doe to secure quiet title
relief and an injunction to extend the redemption period
arising from the judicial sale of his former property. Doc. 1
at 1. Only the claims against defendant Deng remain. The
claims against the United States and John Doe have been
contends he was denied due process because he did not receive
post-sale notice from the Internal Revenue Service
("IRS") after the sale of his property. He now
seeks injunctive relief and quiet title relief against
defendant with respect to the quit claim deed issued by the
IRS to defendant. And, he asserts a right to redeem his
matter comes before the court on three motions. Defendant has
filed a Motion for Summary Judgment (Doc. 31). Plaintiff also
has filed a Motion for Summary Judgment (Doc. 34). And,
defendant has filed a Motion to Supplement (Doc. 37).
seeks summary judgment against each of plaintiff's
claims. Docs. 31 & 32. Plaintiff has filed a Response
(Doc. 36), and defendant has submitted a Reply (Doc. 38).
Plaintiff seeks summary judgment on his injunctive and quiet
title claims as well. Doc. 34. Defendant has filed a
Memorandum in Opposition (Doc. 35). And, the time for
plaintiff to file a reply has expired. Also, plaintiff has
not filed any response to defendant's Motion to
Supplement and the time to do so has expired. The matters
thus are fully briefed, and, after considering the
parties' arguments, the court now is prepared to rule.
reasons explained below, the court grants defendant's
Motion for Summary Judgment (Doc. 31) and Motion to
Supplement (Doc. 37). The court denies plaintiff's Motion
for Summary Judgment (Doc. 34).
following facts are either stipulated by the parties in the
Pretrial Order (Doc. 30) or are uncontroverted for purposes
the parties' summary judgment motions.
Property at Issue and the IRS Sale
and throughout 2016, plaintiff was the owner of, and resided
in, the residence located at 11925 West 92nd Terrace, Lenexa,
Johnson County, Kansas 66215 (the "Residence"). The
IRS filed a tax lien and notices of the lien against the
Residence at various dates from 2005 to 2012.
sought and received approval for a judicial levy on the
Residence in a related suit before our court, In the
Matter of Tax Indebtedness of Scott G. Hattrup, Case No.
15-mc-219-CM (D. Kan. 2015). The judicial levy was approved
on February 10, 2016. The IRS provided plaintiff with a
Notice of Seizure of the Residence on or about April 27,
2016, on Form 2433, as required by 26 U.S.C. § 6335(a).
The IRS provided plaintiff with a Notice of Public Auction
Sale on or about August 24, 2016, on Form 2434 ("Form
2434"), as required by 26 U.S.C. §
6335(b), which listed October 6, 2016, as the intended sale
of Form 2434, delivered to plaintiff, identified the date,
time, and place the sale was to occur. It also identified the
name and contact information for the Property Appraisal &
Liquidation Specialist ("PALS"). It identified
Jennifer L. Breuchaud as the PALS and provided her email
address. Page 1 also gave an "Address for information
about the sale" as 380 Office Ct, Fairview Heights,
Illinois 62208 and provided a phone number.
of Form 2434 stated the redemption rights before sale, per
Section 6337(a) of the Internal Revenue Code. Page 2 also
stated the redemption rights after the sale, per Section
6337(b) of the Internal Revenue Code, including a notice that
the right of redemption runs for 180 days after the sale, and
that the price of redemption is the amount paid at the sale
plus interest on that price at 20% per annum.
sale took place on October 6, 2016. Ms. Breuchaud—the
PALS identified on Form 2434—conducted the sale.
Plaintiff did not attend the sale. Defendant attended the
sale and was the high bidder. Defendant bid $40,000 at the
sale, and, as the high bidder, paid the IRS $40,000 that same
Encumbrances on the Residence
sale "was conducted `subject to any prior valid
outstanding mortgages, encumbrances, other liens in favor of
third parties against the taxpayer that are superior to the
lien of the United States.'" Doc. 36 at 2
(quoting Form 2434, Doc. 32-1 at 2 (emphasis in original)).
The Residence was offered for sale "`where is' and
`as is' and without recourse against the United
States." Id. (quoting Form 2434, Doc. 32-1 at
sale of the Residence was subject to senior encumbrances held
by the Johnson County Treasurer and by the Kansas Department
of Revenue, both agencies of the State of Kansas. The Johnson
County Treasurer and the Kansas Department of
Revenue were not parties to the judicial levy action in
federal court, nor were they identified as parties receiving
notice of the judicial levy action.
County had scheduled a sale of the Residence for November
2016 for payment of the delinquent property taxes. The buyer
at the October 2016 IRS sale was responsible for paying
delinquent property tax before the Johnson County sale. Form
2434 referred to "Approx $60,138.49 in senior
encumbrances that will be paid by the buyer." Doc. 32-1
at 1. It also referenced the planned November 2016 Johnson
County sale, explaining "the[ ] buyer at the 10/6/16
auction will be responsible for payment of delinquent
property tax to the County before the County Sale."
Id. As explained below, this Johnson County sale did
not take place and defendant did not pay the delinquent
property taxes before November 2016.
Activity During the Redemption Period
the sale, the IRS issued defendant a Certificate of Sale of
Seized Property. Ms. Breuchaud handed this certificate
to defendant the day of the sale. Ms. Breuchaud signed the
certificate in her capacity as an IRS employee. The IRS also
gave defendant a letter dated October 6, 2016, notifying
defendant that plaintiff had 180 days after the sale to
redeem, that the redemption period ended April 4, 2017,
and—if the property was not redeemed— that the
IRS would issue defendant a quit claim deed in exchange for
the surrender of the Certificate of Sale of Seized Property
and a statement from her that the property had not been
redeemed. Ms. Breuchaud also handed this letter
to defendant the day of the sale. This letter was signed by
Ms. Breuchaud in her capacity as PALS.
between the October 6, 2016 IRS sale and the Johnson County
sale scheduled to take place in November 2016, defendant
contacted the Johnson County Treasurer's Office to have
the sale cancelled. Later, as explained below, defendant paid
the delinquent property taxes owed to Johnson County.
only correspondence, documents, or emails that plaintiff
received from the IRS at any time between the date of sale on
October 6, 2016, and expiration of the 180-day redemption
period in April 2016, was an untitled demand for interest,
which plaintiff received approximately January 17, 2017, or
shortly thereafter. This demand did not mention that the sale
occurred or that the redemption period had commenced.
Plaintiff did not send any correspondence, documents, or
emails to the IRS (other than any personal tax return or
estimated tax filing) at any time during the redemption
period. Plaintiff did not communicate orally (whether in
person or over the phone) with any employee or representative
of the IRS at any time during the redemption period about the
Residence or the IRS auction of the Residence.
the date of sale and expiration of the 180-day redemption
period, the IRS did not notify plaintiff the sale had
occurred or that the redemption period had commenced. Between
the date of sale and expiration of the 180-day redemption
period, plaintiff did not learn the sale had occurred or that
the redemption period had commenced.
Activity After the Redemption Period
the 180-day redemption period had expired, defendant
surrendered the Certificate of Sale of Seized Property to the
IRS. In exchange, the IRS issued her a quit claim deed to the
Residence. Defendant recorded the quit claim deed
with the Johnson County, Kansas, Records & Tax
Administration on May 15, 2017. After recording the quit
claim deed, defendant went to the Johnson County, Kansas,
Treasurer's office on May 17, 2017, and paid $16,682.40
for delinquent and then-current Kansas real property taxes
owed on the Residence for years 2011, 2012, 2013, 2014, 2015,
and 2016. Since then, defendant has paid the real property
taxes on the Residence for 2017 and 2018, making a collective
total of tax payments by defendant for years 2011 through
2018 of $21,722.75. Defendant has not yet paid any amounts
for the lien filed by the Kansas Department of Revenue. That
lien remains on the title to the property.
contacted counsel, who issued plaintiff a notice-to-quit the
premises on May 17, 2017. Defendant hand-delivered her
counsel's notice-to-quit letter to plaintiff on May 17,
2017. The May 17, 2017, letter was the first
time plaintiff knew that the sale was completed on October 6,
did not quit the Residence as requested in the letter. So,
defendant initiated an eviction action in the District Court
of Johnson County, Kansas, titled Deng v. Hattrup,
Case No. 17LA3672. That court entered its judgment for
possession in favor of defendant on July 26, 2017. Plaintiff
appealed the decision to the Kansas Court of Appeals, Case
No. 118164. The Kansas Court of Appeals affirmed the Johnson
County, Kansas, District Court, in an unpublished opinion
dated June 15, 2018. Plaintiff filed a Petition for Review
with the Kansas Supreme Court on September 11, 2018. The
Kansas Supreme Court denied the Petition for Review on April
sent plaintiff a Form 3074 letter dated July 25, 2017,
enclosing (a) a
Form 2436, Seized Property Sale Report, showing how sale
proceeds were applied to unpaid taxes, (b) a Record 21,
Record of Seizure and Sale, and (c) a Form 2434-B, Notice of
Encumbrances Against or Interest in Property Offered for
Sale. The letter indicates the documents enclosed
"provide a complete record of the seizure and sale as
required by Section 6340 of the Internal Revenue Code."
Doc. 35-7 at 1.
asserts he was denied due process under the Fifth Amendment
to the United States Constitution when the IRS failed to give
him post-sale notice that the sale was complete and his
redemption period had commenced. Plaintiff concedes he
received notice of the sale before the sale took place, but
he asserts this notice was insufficient because it did not
include enough information to allow him to redeem the
property after the sale, if the property indeed was sold at
the scheduled sale. Plaintiff believes he has a due process
right which "[a]t a legal minimum ... includes receiving
the name and last known address of the purchaser, and the
amount of the sale, within a reasonable time after the sale
is concluded." Doc. 30 at 13. Because he did not receive
this notice, plaintiff contends he was denied his right to
redeem the Residence under 26 U.S.C. § 6337.
parties agree 26 U.S.C. § 6337 and federal regulations,
procedure, and case law govern plaintiff's redemption
rights. Doc. 30 at 2. Plaintiff also argues Kan. Stat. Ann.
§ 60-2414—which provides for a 12-month
redemption period—and Kansas case law provide him
additional redemption rights. Id. But, defendant
disagrees and argues Kan. Stat. Ann. § 60-2414 does not
apply here. Id.
seeks injunctive relief under Kan. Stat. Ann. §§
60-901 and 60-906 for the quit
claim deed issued by the IRS to defendant. He would like the
quit claim deed declared void or voidable and an opportunity
to redeem the Residence. Alternatively, he would like the IRS
sale results declared void or voidable. He also seeks quiet
title relief under Kan. Stat. Ann. §
60-1002. Plaintiff's requested relief
hinges on a finding that his due process rights were violated
or, alternatively, a finding that he is entitled to the
12-month redemption period established by Kansas law.
Summary Judgment Standard
judgment is appropriate if the moving party demonstrates that
"no genuine dispute as to any material fact" and
that it is "entitled to a judgment as a matter of
law." Fed.R.Civ.P. 56(a); see also In re Aluminum
Phosphide Antitrust Litig., 905 F.Supp. 1457, 1460 (D.
Kan. 1995). When it applies this standard, the court
"view[s] the evidence and make[s] inferences in the
light most favorable to the non-movant." Nahno-Lopez
v. Houser, 625 F.3d 1279, 1283 (10th Cir. 2010) (citing
Oldenkamp v. United Am. Ins. Co., 619 F.3d 1243,
1245-46 (10th Cir. 2010)).
issue of fact is `genuine' `if the evidence is such that
a reasonable jury could return a verdict for the non-moving
party' on the issue." Id. (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)); see also In re
Urethane Antitrust Litig., 913 F.Supp.2d 1145, 1150 (D.
Kan. 2012) (explaining that "[a]n issue of fact is
`genuine' if `the evidence allows a reasonable jury to
resolve the issue either way.'" (quoting Haynes
v. Level 3 Commc'ns, LLC, 456 F.3d 1215, 1219 (10th
Cir. 2006)). "An issue of fact is `material' `if
under the substantive law it is essential to the proper
disposition of the claim' or defense."
Nahno-Lopez, 625 F.3d at 1283 (quoting Adler v.
Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir.
1998) (citing Anderson, 477 U.S. at 248, 106 S.Ct.
moving party bears "`both the initial burden of
production on a motion for summary judgment and the burden of
establishing that summary judgment is appropriate as a matter
of law.'" Kannady v. City of Kiowa, 590
F.3d 1161, 1169 (10th Cir. 2010) (quoting Trainor v.
Apollo Metal Specialties, Inc.,318 F.3d 976, 979 (10th
Cir. 2002)). To meet this burden, the moving party
"`need not negate the non-movant's claim, but need
only point to an absence of evidence to support the
non-movant's claim.'" Id. (quoting
Sigmon v. CommunityCare HMO, Inc.,234 F.3d 1121,
1125 (10th Cir. 2000)); see also In re Urethane Antitrust
Litig., 913 F.Supp.2d at 1150 (explaining that "a
movant that does not bear the ultimate burden of persuasion
at trial need not negate the other ...